How will federal tax changes impact your Missouri state taxes?
Have you found yourself in a bind with the federal tax changes suddenly impacting your Missouri state taxes? If you are, you aren't alone. With the radical changes that took place last year in the federal tax code, many taxpayers are only now realizing the massive impact those changes are having on their Missouri state taxes as well. But how will these changes impact you and your business,
A recent bill introduced by Representative Crystal Quade of Springfield brings to light a longstanding issue with how the Missouri Department of Revenue calculates anticipated annual state income taxes. In past years, it has not been as big of an issue for employers and citizens because the way the federal-state income tax structures have worked together in the past. However, with the sweeping changes in last year's tax code, that has changed. A recent Kansas City Star article pointed out that with the changes, most individuals have had significantly fewer withholdings removed from their paycheck for state taxes than would be needed to cover their tax liability. This is creating a serious issue for many taxpayers that is being addressed in the legislature.
Representative Mike Moon, from Missouri's 157th Legislative District, had this to say about the issue with state taxes and its impact on Missourians, "The Missouri Department of Revenue quaintly calls “a longstanding inaccurate calculation," created when the department changed the tax table, caused "some employers withheld less in state taxes from workers’ checks in 2018 than they needed to." This miscalculation may result in some Missourians owing more than originally expected (creating an untimely tax burden).
Since the problem was created by the DOR, some grace must be extended by the department. While the taxes owed are due and payable, the due date for payment must be extended to help ease the burden on the taxpayers." Representative Moon stated that he will assist Representative Quade in her effort to extend this tax payment deadline.
By staying on top of this important issue with the federal tax code and starting to plan a strategy for how you'll deal with how these changes are impacting your Missouri state taxes, you'll be able to get everything done in time for April 15, whether anything is able to be pushed through the legislature or not.
AccountRely's staff of experienced accounting and tax professionals can help get you caught up in no time. Please feel free to contact us today to get started.